Strengths and Weaknesses of Accounting Concepts and Conventions
Accounting for Managers
Discuss the strengths and weaknesses of the accounting concepts and conventions and of the regulatory framework (SSAPs and FRSs) that govern published financial statements. Do the criticisms of the concept and the regulatory framework mean that published financial statement do not provide investors with useful information?
Introduction
Strengths
Weaknesses
Information needs of investors
Conclusion
Discuss the strengths and weaknesses of the accounting concepts and conventions and of the regulatory framework (SSAPs and FRSs) that govern published financial statements. Do the criticisms of the concept and the regulatory framework mean that published financial statement do not provide investors with useful information?
Introduction
Limited companies are required by law to prepare and publish financial statements every year. The main statements are the balance sheet, the profit and loss and the cash flow statement. The balance sheet shows the financial position of the business at a particular date while the profit and loss shows the result that is profit or loss from operations for the period. The cash flow statement on its side shows the uses and sources of cash over a period of time. The preparation of the financial statements are based on several accounting concepts and conventions and are governed by regulatory frameworks such as accounting standards and the Companies Act 1985 amongst other. The application of accounting concepts for different transactions in different parts of the business is based on the judgement of the accountants. However this definitely leads to subjectivity as every one may have his own personal conclusion. As a result, accounting standards were issued to eliminate this subjectivity to bring about a certain level of uniformity. The standards issued were known as the statements of standard accounting practice (SSAPs) from the seventies to the nineties and is being replaced gradually by the financial reporting
Discuss the strengths and weaknesses of the accounting concepts and conventions and of the regulatory framework (SSAPs and FRSs) that govern published financial statements. Do the criticisms of the concept and the regulatory framework mean that published financial statement do not provide investors with useful information?
Introduction
Strengths
Weaknesses
Information needs of investors
Conclusion
Discuss the strengths and weaknesses of the accounting concepts and conventions and of the regulatory framework (SSAPs and FRSs) that govern published financial statements. Do the criticisms of the concept and the regulatory framework mean that published financial statement do not provide investors with useful information?
Introduction
Limited companies are required by law to prepare and publish financial statements every year. The main statements are the balance sheet, the profit and loss and the cash flow statement. The balance sheet shows the financial position of the business at a particular date while the profit and loss shows the result that is profit or loss from operations for the period. The cash flow statement on its side shows the uses and sources of cash over a period of time. The preparation of the financial statements are based on several accounting concepts and conventions and are governed by regulatory frameworks such as accounting standards and the Companies Act 1985 amongst other. The application of accounting concepts for different transactions in different parts of the business is based on the judgement of the accountants. However this definitely leads to subjectivity as every one may have his own personal conclusion. As a result, accounting standards were issued to eliminate this subjectivity to bring about a certain level of uniformity. The standards issued were known as the statements of standard accounting practice (SSAPs) from the seventies to the nineties and is being replaced gradually by the financial reporting